High Risk Car Insurance

In an ideal world, all drivers would qualify for the best car insurance rates. Of course, in the real world, some individuals do not. Let’s take a look at why a driver might be considered high-risk in the eyes of insurance companies, and how to lower your car insurance premiums if you find yourself in this situation.

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What is High-Risk Car Insurance?

“High-risk” is a category of car insurance for people deemed more likely to be involved in an accident. There are a number of reasons why someone might be considered a high-risk driver. These include:

  • A conviction for offenses, such as driving under the influence of drugs or alcohol, or reckless driving.
  • Multiple speeding tickets.
  • More than one recent at-fault collision.

High-risk car insurance might also be a good option for drivers who have had a car insurance policy cancelled for non-payment.

It’s also important to note that while they might not necessarily be classified as “high-risk drivers”, young men under the age of 25 pay the highest car insurance premiums in Canada, because stats show they cause more accidents than any other demographic.

How Much Does High-Risk Car Insurance Cost?

Whether through Facility Association* or a specific insurance company, high-risk car insurance can be significantly more expensive (sometimes 2-3 times) than the average car insurance rate. However, the fact that high-risk car insurance exists does help some people drive who, otherwise, might not have been able to get coverage.1

How to Lower Your Premiums If You’re a High-Risk Driver

If you find yourself in the high-risk insurance category, you’ll want to focus on actions that may ultimately see your premiums reduced. The most important thing in this regard is to be a safe driver. After a number of years have passed without either a traffic conviction or an at-fault accident, insurance companies may consider you a lower risk and decrease your premiums accordingly.

In the case of young drivers, one way to lower your student car insurance premiums is to enroll in a recognized driver training course. Successfully completing one of these courses is a sign to insurance companies that you will be a good driver and less likely to get in an accident.

Another way to lower your premiums if you’re a high-risk driver is to take advantage of discounts. Most insurance companies offer discounts that allow you to save, such as:

  • Bundling: Insuring both your car and house with the same company can typically get you at least a 5% discount.
  • Insuring multiple cars: Having more than one vehicle insured through the same company also gives you some discount options.
  • Installing a safety device: Reduces the chance the car will be stolen.

Finally, there’s one more way to lower your car insurance premiums if you’re deemed to be a high-risk driver: increasing your deductible. The deductible is the amount that you have to pay if you want to make a claim. For example, if you have a $1,000 deductible and make a claim for $5,000 due to a collision, the insurance company would only be responsible for paying you up to $4,000 (assuming they agree it’s a valid claim). Increasing your deductible lessens the risks for the insurance company and, therefore, makes you a somewhat more attractive candidate to insure.

Where to Buy High-Risk Car Insurance

Some insurance companies will not insure drivers they deem to be high-risk. They will either not issue a policy in the first place, or decide not to renew an existing policy if they believe a driver has become too risky.

However, insurance is still available for drivers considered high-risk. First, some larger insurance companies will offer policies to riskier drivers. Second, some niche companies are dedicated to serving the high-risk market. In British Columbia, Saskatchewan and Manitoba, high-risk drivers can still obtain insurance from their government insurer. Finally, in cases where no individual company will insure a person, you should be able to obtain insurance through Facility Association as long as you have a valid driver’s license.

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References and Notes

  1. Facility Association is a non-profit organization that guarantees all licensed drivers have access to car insurance in provinces with private car insurance systems.